Net income attributable to the Company was $15.3 million ($0.47 per
share), compared to $13.1 million ($0.41 per share) in Q3 2016.

Net income attributable to the Company, excluding adjustments (a
non-GAAP measure), was $0.57 per share, compared to $0.41 per share in
Q3 2016 (see Table 17).

Adjusted EBITDA (a non-GAAP measure) was $51.9 million, compared to
$42.7 million in Q3 2016 (see Tables 8 and 9). Q3 2017 Adjusted EBITDA
includes a $2.0 million insurance recovery gain related to the theft
in Japan that was reported in Q4 2016.

ROCHESTER, N.H.--(BUSINESS WIRE)--Oct. 30, 2017--
Albany International Corp. (NYSE:AIN) reported that Q3 2017 Net income
attributable to the Company was $15.3 million, including a net benefit
of $3.1 million for income tax adjustments. Q3 2016 Net income
attributable to the Company was $13.1 million, including favorable
income tax adjustments of $0.4 million.

Q3 2017 Income before income taxes was $19.0 million. During Q3 2017,
the Company decided to discontinue the Bear Claw® line of hydraulic
fracking components used in the oil and gas industry, which was part of
the Harris aerostructures business acquired by AEC in 2016. This
decision resulted in a non-cash restructuring charge of $4.5 million for
the write-off of intangible assets and equipment, and a $3.2 million
charge to Cost of goods sold for the write-off of inventory. Q3 2017
results also include $1.0 million of other restructuring charges, $1.5
million of losses from foreign currency revaluation, and an insurance
recovery gain of $2.0 million related to the theft in Japan that was
reported in Q4 2016. Q3 2016 income before income taxes was $20.9
million, including restructuring charges of $0.3 million and gains of
$0.2 million from foreign currency revaluation.

In comparison to Q3 2016, the increase in MC net sales was due to strong
performance in the tissue, packaging and pulp grades, which more than
offset continuing declines in the publication grades. The increase in
AEC net sales was primarily due to growth in the LEAP, 787 fuselage
frames and CH-53K programs.

Table 3 summarizes selling, technical, general and research (STG&R)
expenses by segment:

Table 3

Three Months endedSeptember 30, 2017

Three Months endedSeptember 30, 2016

(in thousands, excluding percentages)

STG&R Expense

Percent of sales

STG&R Expense

Percent of sales

Machine Clothing

$30,258

20.1

%

$28,276

19.7

%

Albany Engineered Composites

10,532

14.7

8,445

17.6

Corporate Expenses

10,839

-

10,553

-

Total

$51,629

23.2

%

$47,274

24.7

%

Losses from the revaluation of nonfunctional-currency assets and
liabilities increased third-quarter STG&R expenses by $1.3 million in
2017 and $0.1 million in 2016. The increase in third-quarter AEC STG&R
expenses is due primarily to higher R&D spending (see table 4) and
higher amortization expense related to acquisition accounting
adjustments made in Q4 2016.

Table 4 summarizes third-quarter expenses associated with internally
funded research and development by segment:

Table 4

Research and development expenses by segmentThree Months
endedSeptember 30,

(in thousands)

2017

2016

Machine Clothing

$4,229

$3,937

Albany Engineered Composites

3,828

2,656

Total

$8,057

$6,593

Table 5 summarizes third-quarter operating income by segment:

Table 5

Operating Income/(loss)Three Months endedSeptember 30,

(in thousands)

2017

2016

Machine Clothing

$42,674

$40,039

Albany Engineered Composites

(9,301

)

(4,529

)

Corporate expenses

(11,070

)

(10,690

)

Total

$22,303

$24,820

Table 6 presents the effect on operating income from restructuring,
currency revaluation, and the Bear Claw® inventory write-off:

Table 6

Expenses in Q3 2017resulting from

Expenses/(gain) in Q3 2016resulting from

(in thousands)

Restructuring

Revaluation

Bear Claw®InventoryWrite-off

Restructuring

Revaluation

Machine Clothing

$96

$1,114

$-

($212

)

$86

Albany Engineered Composites

5,407

137

3,155

640

-

Corporate expenses

-

5

-

(102

)

4

Total

$5,503

$1,256

$3,155

$326

$90

AEC restructuring charges in Q3 2017 consisted primarily of non-cash
charges (write-off of intangibles and equipment) associated with the
decision to exit the Bear Claw® product line. In October 2017, the
Company announced that its MC entity in France had initiated discussions
with the local works council regarding a potential restructuring. Due to
the ongoing nature of those discussions, the Company has not recorded a
restructuring charge related to this proposal.

Q3 2017 Other income/expense, net, was income of $1.2 million, including
losses related to the revaluation of nonfunctional-currency balances of
$0.3 million, and an insurance recovery gain of $2.0 million related to
the theft in Japan that was reported in Q4 2016. Q3 2016 Other
income/expense, net, was expense of $0.2 million, including income
related to the revaluation of nonfunctional-currency balances of $0.3
million.

The Company’s income tax rate based on income from continuing operations
was 36.4% for Q3 2017, compared to 37.5% for Q3 2016. Discrete tax items
and the effect of a change in the estimated income tax rate decreased
income tax expense by $3.1 million in Q3 2017, principally due to a
reduction in net deferred tax asset valuation allowances in certain
countries. Discrete tax items and the effect of a change in the
estimated income tax rate decreased income tax expense by $0.4 million
in Q3 2016.

Tables 8 and 9 provide a reconciliation of operating income and net
income to EBITDA and Adjusted EBITDA:

Table 8

Three Months ended September 30, 2017(in thousands)

MachineClothing

AlbanyEngineeredComposites

Corporateexpensesand other

TotalCompany

Operating income/(loss) (GAAP)

$

42,674

$

(9,301

)

$

(11,070

)

$

22,303

Interest, taxes, other income/expense

-

-

(7,083

)

(7,083

)

Net income (GAAP)

42,674

(9,301

)

(18,153

)

15,220

Interest expense, net

-

-

4,429

4,429

Income tax expense

-

-

3,809

3,809

Depreciation and amortization

8,380

8,591

1,159

18,130

EBITDA (non-GAAP)

51,054

(710

)

(8,756

)

41,588

Restructuring expenses, net

96

5,407

-

5,503

Foreign currency revaluation losses

1,114

137

266

1,517

Write-off of inventory in a discontinued product line

-

3,155

-

3,155

Pretax loss attributable to non-controlling interest in ASC

-

136

-

136

Adjusted EBITDA (non-GAAP)

$

52,264

$

8,125

$

(8,490

)

$

51,899

Table 9

Three Months ended September 30, 2016(in thousands)

MachineClothing

AlbanyEngineeredComposites

Corporateexpensesand other

TotalCompany

Operating income/(loss) (GAAP)

$

40,039

$

(4,529

)

$

(10,690

)

$

24,820

Interest, taxes, other income/expense

-

-

(11,411

)

(11,411

)

Net income (GAAP)

40,039

(4,529

)

(22,101

)

13,409

Interest expense, net

-

-

3,681

3,681

Income tax expense

-

-

7,488

7,488

Depreciation and amortization

9,032

8,027

1,386

18,445

EBITDA (non-GAAP)

49,071

3,498

(9,546

)

43,023

Restructuring expenses, net

(212

)

640

(102

)

326

Foreign currency revaluation losses/(gains)

86

-

(308

)

(222

)

Pretax (income) attributable to non-controlling interest in ASC

-

(428

)

-

(428

)

Adjusted EBITDA (non-GAAP)

$

48,945

$

3,710

$

(9,956

)

$

42,699

Payments for capital expenditures were $15.5 million in Q3 2017,
compared to $22.5 million in Q3 2016. Depreciation and amortization was
$18.1 million in Q3 2017, compared to $18.4 million in Q3 2016.

CFO Comments

CFO and Treasurer John Cozzolino commented, “Cash flow in the third
quarter improved compared to the first half of the year. The improvement
was primarily the result of strong operating performance and lower
capital expenditures. Cash balances increased about $15 million to a
total of $153 million, while total debt increased about $10 million to
$506 million as of the end of the quarter. The combined effect of those
two changes resulted in a $5 million decrease to net debt (total debt
less cash, see Table 19) to a balance of $352 million as of the end of
the quarter. The Company’s leverage ratio, as defined in our primary
debt agreements, was 2.55 at the end of Q3 2017, unchanged from Q2 and
well below our limit of 3.50.

”Payments for capital expenditures in Q3 were about $15 million, lower
than the previous two quarters due to timing of required cash payments.
We expect total company capital expenditures in Q4 and through 2018 to
be in the range of $20 - $25 million per quarter, as several key AEC
programs continue to ramp.

“The Company’s income tax rate based on income from continuing
operations was about 36% in Q3 2017, compared to 35% for the full-year
2016. The Company expects the full-year rate for 2017 to stay at
approximately 36%. Cash paid for income taxes was about $3 million in
Q3, bringing the year-to-date total to $22 million. For the full year,
we estimate cash taxes to range from $25 million to $28 million.”

CEO Comments

CEO Joseph Morone said, “Q3 2017 was an especially strong quarter for
Albany International. Aggregate sales, Net income and Adjusted EBITDA
grew sharply; MC’s performance was outstanding; and AEC continued its
rapid growth, took another incremental step forward in profitability,
and made good progress on its multiple ramp-ups and new business
development. Both businesses are now on pace to outperform our
previously upgraded full-year targets.

“MC sales grew in comparison to both Q3 2016 and Q2 2017, due to a
combination of strong performance and good economic conditions,
especially in the Americas. The market trends of recent quarters
continued. Sales in the publication grades again declined, though only
by about 3% compared to Q3 2016, while sales in packaging, tissue and
pulp grades grew. Although pricing pressure remained intense, Albany’s
pricing was once again stable, except in the publication grades where
pricing pressure is greatest. New product performance was outstanding
across virtually all product lines, and development of the new
technology platform continued to advance impressively. Gross margins
remained strong, due to good productivity gains and lower material costs.

“Because of end-of-year seasonal effects and the regression we typically
experience after especially strong quarters, Q4 will likely be the
weakest quarter of the year. But on a year-over-year basis, because of
good backlogs and healthy economic conditions, we expect Q4 2017 to be
comparable to Q4 2016. Given the strong year-to-date performance in MC,
this means that we now expect full-year Adjusted EBITDA to be at least
at the high-end of our normal $180 million to $195 million range.

“In AEC, compared to Q3 2016, sales increased by nearly 50%, driven by
growth in the LEAP, 787 fuselage frames, and CH-53K programs. Every AEC
plant is now facing the steepest part of their ramp-ups. Each made good
progress on quality and yield improvements, and in hiring, training, and
installation and qualification of new equipment. It is worth noting in
this regard that we are now constructing a second plant in Queretaro,
Mexico. The first plant, which is dedicated to LEAP fan blades and is a
satellite of the Rochester, New Hampshire LEAP plant, is on schedule to
begin production in Q4. The second plant, which we need to handle
growing demand for other engine components, will be a satellite of our
Boerne, Texas operation and is scheduled to begin production in the
second half of next year.

“As expected, the simultaneously high rates of hiring, training and
equipment installation across our plants held back productivity in Q3,
and will continue to do so for several more quarters. Nonetheless, AEC
continues to make steady, incremental progress toward its long-term
profitability objective of 18% to 20% Adjusted EBITDA as a percent of
sales by 2020. Because of the discontinuation of the non-aerospace Bear
Claw® product line, operating income declined compared to Q3 2016.
However, Adjusted EBITDA as a percent of sales grew to 11%, compared to
8% in Q3 2016.

“R&D spending grew sharply in the quarter, in support of rapidly
accelerating new business development activity. AEC is actively
exploring opportunities for near-term growth with existing customers,
both on programs already under contract and on programs that would be
new for AEC. Good progress was also made on longer-term growth
prospects, on both commercial and defense platforms. Given the
encouraging progress, we expect to update our projection of AEC’s 2020
revenue potential on our Q4 earnings call.

“As for the near-term outlook for AEC, we expect continued sharp sales
growth in Q4, and despite the heavy ramp-up activity, stable or
incrementally improved profitability. Last quarter, we revised upward
our revenue outlook for the year to the high end of our previously
stated outlook of 25% to 35% full-year revenue growth. We now expect
full-year revenue growth to be between 35% and 40%.

“In sum, this was an outstanding quarter for Albany, with good
performance in both businesses, and a stronger full-year outlook for
each business than the already strong, upgraded estimates we provided on
our last earnings call.”

About Albany International Corp.

Albany International is a global advanced textiles and materials
processing company, with two core businesses. Machine Clothing is the
world’s leading producer of custom-designed fabrics and belts essential
to production in the paper, nonwovens, and other process industries.
Albany Engineered Composites is a rapidly growing supplier of highly
engineered composite parts for the aerospace industry. Albany
International is headquartered in Rochester, New Hampshire, operates 22
plants in 10 countries, employs 4,400 people worldwide, and is listed on
the New York Stock Exchange (Symbol AIN). Additional information about
the Company and its products and services can be found at www.albint.com.

This release contains certain non-GAAP metrics, including: percent
change in net sales excluding currency rate effects (for each segment
and the Company as a whole); EBITDA and Adjusted EBITDA (for each
segment and the Company as a whole, represented in dollars or as a
percentage of net sales); net debt; and net income per share
attributable to the Company, excluding adjustments. Such items are
provided because management believes that, when reconciled from the GAAP
items to which they relate, they provide additional useful information
to investors regarding the Company’s operational performance.

Presenting increases or decreases in sales, after currency effects
are excluded, can give management and investors insight into underlying
sales trends. EBITDA, or net income with interest, taxes, depreciation,
and amortization added back, is a common indicator of financial
performance used, among other things, to analyze and compare core
profitability between companies and industries because it eliminates
effects due to differences in financing, asset bases and taxes. An
understanding of the impact in a particular quarter of specific
restructuring costs, acquisition expenses, currency revaluation,
inventory write-offs associated with discontinued businesses, or other
gains and losses, on net income (absolute as well as on a per-share
basis), operating income or EBITDA can give management and investors
additional insight into core financial performance, especially when
compared to quarters in which such items had a greater or lesser effect,
or no effect. Restructuring expenses in the MC segment, while frequent
in recent years, are reflective of significant reductions in
manufacturing capacity and associated headcount in response to shifting
markets, and not of the profitability of the business going forward as
restructured. Net debt is, in the opinion of the Company, helpful to
investors wishing to understand what the Company’s debt position would
be if all available cash were applied to pay down indebtedness. EBITDA,
Adjusted EBITDA and net income per share attributable to the Company,
excluding adjustments, are performance measures that relate to the
Company’s continuing operations.

Percent changes in net sales, excluding currency rate effects, are
calculated by converting amounts reported in local currencies into U.S.
dollars at the exchange rate of a prior period. That amount is then
compared to the U.S. dollar amount reported in the current period. The
Company calculates EBITDA by removing the following from Net income:
Interest expense net, Income tax expense, Depreciation and amortization.
Adjusted EBITDA is calculated by: adding to EBITDA costs associated with
restructuring, inventory write-offs associated with discontinued
businesses and pension settlement charges; adding (or subtracting)
revaluation losses (or gains); subtracting (or adding) gains (or losses)
from the sale of buildings or investments; subtracting insurance
recovery gains in excess of previously recorded losses; subtracting (or
adding) Income (or loss) attributable to the non-controlling interest in
Albany Safran Composites (ASC); and adding expenses related to the
Company’s acquisition of Harris Corporation’s composite aerostructures
division. Adjusted EBITDA may also be presented as a percentage of net
sales by dividing it by net sales. Net income per share attributable to
the Company, excluding adjustments, is calculated by adding to (or
subtracting from) net income attributable to the Company per share, on
an after-tax basis: restructuring charges; inventory write-offs
associated with discontinued businesses; discrete tax charges (or gains)
and the effect of changes in the income tax rate; foreign currency
revaluation losses (or gains); acquisition expenses; and losses (or
gains) from the sale of investments.

EBITDA, Adjusted EBITDA, and net income per share attributable to the
Company, excluding adjustments, as defined by the Company, may not be
similar to similarly named measures of other companies. Such measures
are not considered measurements under GAAP, and should be considered in
addition to, but not as substitutes for, the information contained in
the Company’s statements of income.

The Company discloses certain income and expense items on a per-share
basis. The Company believes that such disclosures provide important
insight into underlying quarterly earnings and are financial performance
metrics commonly used by investors. The Company calculates the quarterly
per-share amount for items included in continuing operations by using
the income tax rate based on income from continuing operationsand
the weighted-average number of shares outstanding for each period.
Year-to-date earnings per-share effects are determined by adding the
amounts calculated at each reporting period.

Table 10

Net Sales

Nine Months ended

September 30,

Percent

Impact ofChangesin Currency

PercentChangeexcludingCurrency

(in thousands, excluding percentages)

2017

2016

Change

Translation Rates

Rate Effect

Machine Clothing (MC)

$440,093

$437,445

0.6

%

$(1,311

)

0.9

%

Albany Engineered Composites (AEC)

196,896

129,348

52.2

(263

)

52.4

Total

$636,989

$566,793

12.4

%

$(1,574

)

12.7

%

Table 11

Nine Months ended September 30, 2017(in thousands)

MachineClothing

AlbanyEngineeredComposites*

Corporateexpensesand other

TotalCompany

Operating income/(loss) (GAAP)

$

119,352

$

(32,242

)

$

(33,523

)

$

53,587

Interest, taxes, other income/expense

-

-

(26,160

)

(26,160

)

Net income (GAAP)

119,352

(32,242

)

(59,683

)

27,427

Interest expense, net

-

-

13,042

13,042

Income tax expense

-

-

12,138

12,138

Depreciation and amortization

25,098

24,613

3,545

53,256

EBITDA (non-GAAP)

144,450

(7,629

)

(30,958

)

105,863

Restructuring expenses, net

1,012

9,208

-

10,220

Foreign currency revaluation losses

4,427

171

2,318

6,916

Write-off of inventory in a discontinued product line

-

3,155

-

3,155

Pretax (income) attributable to non-controlling interest in ASC

-

(178

)

-

(178

)

Adjusted EBITDA (non-GAAP)

$

149,889

$

4,727

$

(28,640

)

$

125,976

* Includes charge of $15.8 million related to revisions in the
estimated profitability of two long-term contracts.

* Due to the uncertainty of these items, management is currently
unable to project restructuringexpenses and foreign currency
revaluation gains/losses for the remainder of the year.

This press release may contain statements, estimates, or projections
that constitute “forward-looking statements” as defined under U.S.
federal securities laws. Generally, the words “believe,” “expect,”
“intend,” “estimate,” “anticipate,” “project,” “will,” “should,” “look
for,” and similar expressions identify forward-looking statements, which
generally are not historical in nature. Forward-looking statements are
subject to certain risks and uncertainties (including, without
limitation, those set forth in the Company’s most recent Annual Report
on Form 10-K or Quarterly Report on Form 10-Q) that could cause actual
results to differmaterially from the Company’s historical
experience and our present expectations or projections.

Forward-looking statements in this release or in the webcast include,
without limitation, statements about macroeconomic, geopolitical and
paper-industry trends and conditions during 2017 and in future years;
expectations in 2017 and in future periods of sales, EBITDA, Adjusted
EBITDA (both in dollars and as a percentage of net sales), income, gross
profit, gross margin, cash flows and other financial items in each of
the Company’s businesses, including the acquired composite
aerostructures business, and for the Company as a whole; the timing and
impact of production and development programs in the Company’s AEC
business segment and the sales growth potential of key AEC programs, as
well as AEC as a whole; the amount and timing of capital expenditures,
future tax rates and cash paid for taxes, depreciation and amortization;
future debt and net debt levels and debt covenant ratios; and changes in
currency rates and their impact on future revaluation gains and losses.
Furthermore, a change in any one or more of the foregoing factors could
have a material effect on the Company’s financial results in any period.
Such statements are based on current expectations, and the Company
undertakes no obligation to publicly update or revise any
forward-looking statements.

Statements expressing management’s assessments of the growth
potential of its businesses, or referring to earlier assessments of such
potential, are not intended as forecasts of actual future growth, and
should not be relied on as such. While management believes such
assessments to have a reasonable basis, such assessments are, by their
nature, inherently uncertain. This release and earlier releases set
forth a number of assumptions regarding these assessments, including
historical results, independent forecasts regarding the markets in which
these businesses operate, and the timing and magnitude of orders for our
customers’ products.

Historical growth rates are no guarantee of future growth, and such
independent forecasts and assumptions could prove materially incorrect
in some cases.